FOR TUESDAY: (7/11) Trade waiting on USDA report for Wednesday but may not mean much if weather shifts. Usually by the 2nd week of July you have to be short corn. We watch patterns to keep us out of trouble and corn needs at least one more high to 424-5 on Dec. and beans to 1092-6. Wheat might get dragged to 590-600 and has the worst fundamentals. Cattle not happy with higher feed prices for now.
DEC. CORN (electronic ok)
SWING TRADING RECOMMENDATION: Buy Dec. corn at 410.25 and 409.50 with a 403.50 stop.
TODAY’S COMMENTS: (7/11) Patterns suggest the need for a 6-point pullback to 409-10 and then a 9-10 rally that would go to 418-20. Needing a 13-point pullback from there to 405-407 and one more new high to 425 and then the market should be done. At some point wondering if Chicago rains will hit trade psychology more than is realistic.
OVERALL: We could see Dec. corn hit 424-5 if wheat keeps going and it would be a gift but now it’s early July and the crop will pollinate soon and the forecast is hot and dry. Luckily we had banked great profits on July corn shorts last Tuesday. Given the size of the crop, hard to imagine 450. Corn will have to take out 387 to issue a sell signal.
WEEKLY CHARTS: Continuation charts had pointed to 405 earlier in the year and that is still 35 cents higher which would take Dec. corn up to 424. We have to hedge with these prices but have to watch the crazy funds with eyes behind our head. Continue to use strength and buy Dec. puts to withstand the volatility.
CYCLES OVERVIEW: Volatile/recovering higher Tuesday; lower Wednesday; lower Thursday/Friday; recovering July 17.
